Bombardier Inc. T.BBD.A

Alternate Symbol(s): T.BBD.B | T.BBD.PR.B | T.BBD.PR.C | T.BBD.PR.D | BDRPF | BOMBF | BDRXF | BDRAF | BDRBF

Industrials Aerospace & Defense

Bombardier Inc. is a Canada-based manufacturer of business aircraft with a global network of service centers. The Company is focused on designing, manufacturing and servicing business jets. The Company has a worldwide fleet of more than 5,000 aircraft in service with a variety of multinational corporations, charter and fractional ownership providers, governments and private individuals. It operates aerostructure, assembly and completion facilities in Canada, the United States and Mexico. Its robust customer support network services the Learjet, Challenger and Global families of aircraft, and includes facilities in strategic locations in the United States and Canada, as well as in the United Kingdom, Germany, France, Switzerland, Austria, the United Arab Emirates, Singapore, China and Australia. The Company's jets include Challenger 350, Challenger 3500, Challenger 650, Global 5500, Global 6500, Global 7500 and Global 8000.

TSX:BBD.A - Post by User

Bombardier Inc.

Bullboard Posts

Post by anon314on Sep 26, 2014 5:49am

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Post# 22972534

Canaccord Genuity Research Report

From David Tyerman on 25 Sep 2014

BUY for margin expansion potential, new products

We continue to recommend BUYing Bombardier (BBD) due to 1) surprisingly good CSeries order flow at the Farnborough air show, 2) increased focus on improving profitability at Bombardier Aerospace (BA), and 3) margin improvement potential from the weak Canadian dollar.

BT continues to hold potential

BBD held an investor trip to Europe this week. Key stops included a meeting with Bombardier Transportation (BT) President, Dr. Lutz Bertling and plant tours of BT’s largest facility, Henningsdorf, and the Bombardier Aerospace (BA) CSeries wing plant in Belfast. Takeaways include:

 BT sales growth looks positive. Growth should be in the 5-10% per year range for the next 3 years, and 3-5% per year thereafter;
 BT still believes 8% EBIT margins are quite possible, which would be a big pickup from the 6% targeted for 2014;
 The CSeries continues to progress, with production wings moving through the Belfast plant. Belfast’s composite technology also appears impressive and proprietary.

Forecast bumped on BT sales discussion; target bumped on forecast

The BT sales guidance was higher than we were projecting, so we increased our forecast to be in line with the growth rates outlined by management. Our target increased on our new forecast.

Valuation maintained at a premium level

We are maintaining our valuation multiple at 9.0x EV/NTM EBITDA in one year (9.0x Q2/15E EV to Q3/15E - Q2/16E EBITDA). Our valuation remains at a premium level, reflecting the significant EPS growth potential from BBD’s new product and other opportunities.